Philip Morris says today's High Court decision supporting the plain packaging of cigarettes would not affect other legal challenges to the Australian government's plan. Following the court decision, challenges to Australia's packaging rules remain from three countries - the Dominican Republic, Honduras, and Ukraine - through the World Trade Organisation. Marlboro-maker Phillip Morris is also suing Australia for alleged breaches of Australia's Bilateral Investment Treaty with Hong Kong.
“We believe that Philip Morris Asia's investment treaty case and the WTO challenges are strong,” said PML spokesperson Chris Argent. “As such, there is still a long way to go before all the legal questions about plain packaging are fully explored and answered.”
The High Court today ruled in favour of the federal government, rejecting tobacco companies' claims that the world's first plain-packaging laws for cigarette packs were unconstitutional. The firms had argued that the government had effectively stolen their intellectual property.
The cases, to be resolved over the next three years, will hinge on whether Australia has breached existing trade and treaty obligations. Phillip Morris and other tobacco companies will also press for compensation depending on how much the plain-packaging move cuts smoking.
Wholesale tobacco generated revenues of $2.2 billion in the year to June 2012, according to IBIS World. Households, though, spent a combined $11.1 billion on tobacco, once taxes and other costs were added.
Trade and legal experts said, however, that today's verdict will likely influence international rules governing cigarette sales, as well as the thinking behind trade agreements.
Australian National University law professor Matthew Rimmer said the High Court of Australia has “driven a stake through the undead vampire heart of the tobacco industry” which had long used intellectual property cases in various jurisdictions involving trademarks "to frustrate regulation in regards to health."
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